It’s complicated to get rent to rent right in supported living. On social media you will find people talking about this and making it out to be easy and simple. I think in reality it is complex and there are many barriers.  

Rent-to-rent in supported living, is a when a person rents a property from a property owner and then sub lets this property to supported living provider. Usually, the way they would make money would be by charging more rent to the provider each month than they are paying the property owner and this uplift they would keep as profit. The theory is in supported living you would not be managing the property, so you could get away with a small uplift and take that as pure profit each month. In theory this seems appealing and you can understand why people are keen to explore this as an income stream. 

Rents in supported living are closely scrutinised by the local authority and supported living providers need to complete complicated forms, to justify how they got to the housing benefit amount they are claiming. I do not think most local authorities will look favourably upon paying a higher rent because there is a rent-to-rent operator in the equation.   

There are people claiming they are making large uplifts each month and making good money from this model, but I am not sure how sustainable this in the long term, especially as local authority budgets are under such pressure and housing benefit decisions are being reviewed regularly.

Before you sign a rent to rent agreement on a property for supported living you will need to carefully consider the compliance of the property i.e. does it have the right mortgage and insurance in place. You will need to ensure the lease with the supported living provider mirrors the length of the rent-to-rent agreement with the property owner. You would also need to be very careful that the lease wording did not leave you exposed to repairs, voids or any other liabilities as you may not have sufficient income to cover these.    

Providers should be doing thorough due diligence on the property they are leasing and the person they are leasing the property from. In my experience, and I speak to a LOT of supported living providers, most high quality, experienced providers will be cautious about leasing a property from you, if you do not own the property. They may be concerned about how their regulator will view the arrangement, about being left exposed or the implications for their tenants for whom a providing a stable long term home is their priority.  

If you were to find a provider who was happy with a rent-to-rent agreement I think there are a few situations where it could work: 

  • If you could rent a property i.e a family house and then turn it into something of higher rental value to meet the needs of the provider, i.e an HMO, you could then justify the uplift in rent from house to HMO. 
  • If you can negotiate a very low rent for the property and then charge the provider the market rent, keeping the uplift as your profit each month. 

I know there are some people making rent-to-rent work in supported living, and I suspect I will be seen as being negative by giving this opinion.  I am not interested in popularity, I think it’s important I am honest with you about the reality and the challenges and not sell you a dream.  I could make thousands of pounds each month, if I wrote and sold a “rent to rent in supported living” course as I am asked for it most days. However I will only promote things that I think are ethical and sustainable and I would rather you look at other ways to make supported living work for your property business. 

If you do not have the money to put down a deposit to buy a supported living property, then look at other ways to get involved. Here are four other strategies you could use to invest in supported living: 

  1. Could you learn some creative ways to buy property and then buy property to meet the needs of providers? 
  2. Maybe you could work with investors to buy property for supported living? 
  3. How about building relationships with providers and helping them find property they need? 
  4. Or could you source property for investors and add a supported living lease to your sourcing package? 

If you want to learn more about supported living, so you can get involved in a safe sustainable way, then I have a range of courses you can explore to help you understand this much needed area of property investing, you can find out more here,  or if you want to learn more and build relationships with providers then have a look at The Supported Living Property Network. I know I’m probably not giving you the answer you want to read here, however I believe if you know what you are doing, investing in supported living property can build long term wealth, while you create much needed homes for those who need them most. 


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